In order to reveal the true current investor sentiment in private equity industry, Preqin has undertaken a survey of 100 prominent institutional investors from around the world, and is today releasing this report to the press. The survey took place in July 2009.
Key points include:
In contrast to past years where investors would be making numerous new investments throughout the year in order to maintain their allocation to private equity, in the first half of 2009 only 41% of those polled have made any new investments at all.
Two thirds of investors are still either at or exceeding their targeted level of exposure to private equity.
Despite the slow pace of commitments made by investors so far in 2009, only 9% of investors intend to decrease their allocations to private equity in the next 12 months.
Investors are still showing an appetite for private equity over the longer term, and 30% intend to increase their target allocations to the asset class in the next 3-5 years.
54% of investors we surveyed expected to make new commitments to private equity funds in H2 2009, and a further 25% will recommence investment in the asset class in 2010.
Comment of Helen Kenyon manager, Investor Data:
Investors have displayed an increasing degree of caution when approaching new commitments to private equity funds in recent months. The decline in the rate of distributions from portfolio funds has also meant that, though the majority of investors are intending to maintain the level of their exposure to the asset class, they are not at present under the same pressure to make new commitments to achieve this.
This, combined with current market uncertainty, has meant that almost half of investors have opted not to invest this year. Despite this, certain areas of the private equity market have still drawn lots of support from investors, in particular distressed private equity, cleantech and secondaries funds. Furthermore, our survey has shown that, though the pace at which new investments are being made to the asset class is considerably down on previous years, investor appetite for private equity looks set to remain strong over the longer term, and there is little evidence to suggest investors will be reducing their allocations or exiting the asset class.
In order to see the full report, please visit the following page.
L.D.